Seacoast Banking deal bets on Miami’s allure for financial, tech workers

Prolific acquirer Seacoast Banking Corp. of Florida struck its biggest deal to date on Monday — a $488.6 million buyout of Professional Bank.

Seacoast, a $10.8 billion-asset bank in Stuart, Florida, said the deal would bolster its footprint in the Greater Miami area. Professional Bank, the sixth-largest lender headquartered in South Florida, operates nine branches across Miami-Dade, Broward and Palm Beach counties. Collectively, these markets make up the largest metropolitan area in Florida and the eighth largest in the nation, Seacoast noted in a release announcing the deal.

The $2.7 billion-asset Professional Bank has deposits of approximately $2.4 billion and loans of $2.0 billion. The deal is expected to close in the first quarter of 2023 and punctuate a robust spate of M&A activity for Seacoast.

“We will add significant scale in one of the best banking markets in the country,” Charles Shaffer, chairman, president and CEO of Seacoast said during a call Monday to discuss the deal. “The growth profile is amazing.”

South Florida’s population growth and rate of new business formation has accelerated since the onset of the pandemic, Shaffer said. When other major states, including New York and California, locked down their business communities in 2020 and into last year, Florida largely remained open. The result: Business owners relocated from markets such as Manhattan and Los Angeles to Florida, bringing employees with them.

Miami, in particular, “is transforming into a financial and technology powerhouse,” Shaffer said.

Professional carved out an attractive niche serving doctors, lawyers and other high-net-worth professionals in South Florida, he said. This corner of the market is expected to expand along with the Greater Miami-area population and business community, he said.

Professional also has been a leader among community banks in developing digital tools for its bankers and clients, analysts noted.

“Professional brings a solid organic growth trajectory in attractive markets” and “brings a tech-forward platform,” said Raymond James analyst David Feaster.

Seacoast closed seven deals over a five-year period through 2021, and it followed up with two more in January of this year — its acquisitions of Sabal Palm Bancorp and Business Bank of Florida Corp.

Then in March, Seacoast agreed to buy Apollo Bancshares in Miami for $168 million. Two months later, the bank said it was also acquiring Drummond Banking Co. in Chiefland, Florida, for $173 million.

“With the combined scale” of all the deals, “we will bring to market a larger balance sheet, a greater digital product set and the resources to become South Florida’s most competitive community bank,” Shaffer said.

Seacoast expects the Professional Bank transaction to be 11.8% accretive to earnings per share in 2023, and 15.4% in 2024, with “modest” dilution of tangible book value per share that will be earned back in just over two years. It projected cost savings of at least 40% of the target’s non-interest expense base by combining the two banks. The savings would be fully realized in 2024.

Abel Iglesias, president and CEO of Professional Holding Corp., the parent of Professional Bank, plans to join Seacoast as its Miami-Dade regional president.